Bitcoin DeFi Ecosystem targets $10B valuation if Ethereum’s Hoodi update flops, says BitcoinOS CEO

• Bitcoin price stabilised above $81,000 on Tuesday, consolidating within a tight 5% range in the last past week.
• BTC/ETH trading ratio hit all-time highs ahead of Ethereum’s Hoodi update as the smart-contract network’s struggle for scalability heightens.
• BitcoinOS CEO, Edan Yago has talked up the prospects of Bitcoin-native decentralized finance protocols encroaching Ethereum’s market share in near-term.
• Bitcoin DeFi TVL hit $5 billion this week, targeting fresh inflows as Ethereum struggles with network updates.

Bitcoin price remained pinned below $85,000 on Monday, with Gold’s rally to record highs, and Ethereum’s Hoodi dominating media discourse.

In an exclusive FXStreet interview, BitcoinOS CEO, Edan Yago has offered insights on how decentralized finance protocols built on the Bitcoin network could offer competitive yield bearing solutions as Ethereum struggles under its recent spate of flopped network updates. 

BTC/ETH ratio hits all-time highs as Bitcoin extends lead over Ethereum by 30% in three weeks  

At launch in 2015, Ethereum was tipped to replace Bitcoin in terms of market cap on ambitious economic prospects  of introducing decentralized finance through smart contracts. However, as of March 2025, the Bitcoin ecosystem has extended the lead to record highs. 

Ethereum initially managed to close the gap. But since the infamous Merge, transitioning from Proof-of-Stake to Proof-of-Work back in September 2022, Bitcoin has consistently outperformed Ethereum. 

BTC/ETH Ratio | March 18, 2025 | TradingView/Vantage

But notably, the gap between Bitcoin and Ethereum valuations increased by a remarkable 30% in March 2025, hitting new all time highs this week. 

Referencing the TradingView chart above, BTC/ETH trading ratio which compares the real-time prices of both assets hit an all-time high of 44.6 on March 14.

With both assets trading at $81,000 and $1,800 respectively, this implies that 1 BTC can currently purchase over 44 ETH, up 30% from the 1:33 ratio observed at recent lows on February 25. 

BTC price gaining 30% ground on ETH within a month reflects that investors are actively  allocating more capital towards BTC as the Ethereum network’s struggle for scalability continues.

Ethereum Network Misses threatens $100B DeFi Ecosystem 

Ethereum’s devaluation has been linked to two factors. In terms of recent catalysts, Trump’s latest Trade tariff policies have unsettled the macroeconomic landscape prompting crypto investors to de-risk by leaning into BTC. 

However, historical charts above also affirms that Ethereum’s devaluation phase began around the Ethereum merge, and multiple update mishaps that have seen ETH supply exceed pre-merge levels. 

The Ethereum Foundation has made frantic efforts to correct the course, staging a leadership shuffle in late-February.

However, market sentiment after the two latest Ethereum network updates, the Pectra and Hoodi, suggest that market sentiment has not improved. 

As major concerns arise that ETH underwhelming price action, and network update misses could put Ethereum $100 billion DeFi market at risk, potentially driving investor attention towards alternative defi ecosystems.   

According to BitcoinOS CEO, Edan Yago, it is only a matter of time before BTC’s growing market dominance extends to the Bitcoin DeFi protocols.

BitcoinOS is a modular, open-source project aiming to enable fast, cheap transactions, to the Bitcoin blockchain, with capabilities to deploy smart contracts interoperable with Ethereum Virtual Machine (EVM) and other chains.

In an exclusive interview with FXStreet, Edan Yago offers expert insights on how Ethereum's recent struggles and enhanced regulatory clarity from Trump’s latest policy proposals puts Bitcoin DeFi projects in prime position to gain more market share. 

• Question 1 (Q1): Will is Bitcoin a legitimate alternative for DeFi in the face of Ethereum’s network congestion issues?

Edan Yago: "We see Bitcoin as a superior solution for DeFi not just an alternative. The biggest flaw in Ethereum’s approach is the reliance on multiple L2s, which create user friction and liquidity fragmentation. Bitcoin circumvents these challenges by enabling seamless interoperability across chains while retaining Bitcoin’s security.

This means that while Ethereum continues to struggle with rollups and gas fees, Bitcoin DeFi protocols become more attracting to developers and investors."

• Q2: Could Trump’s Bitcoin Strategic Reserve accelerate the institutional adoption of Bitcoin-backed DeFi products?

Edan Yago: Absolutely. We are already seeing BitcoinOS being used to launch Bitcoin-backed stablecoins like USBD from BIMA Labs.

This marks a fundamental shift from the existing model where Bitcoin simply sits in cold storage as a static asset.

Institutions can unlock yield-bearing opportunities for BTC while ensuring their exposure remains non-custodial and trust-minimized.

This is crucial as regulatory frameworks evolve, making it clear that Bitcoin is the ideal base layer for sovereign-grade financial infrastructure.

• Q2. What are the risks of Bitcoin-native DeFi, and how does BitcoinOS mitigate them?

Edan Yago: Like any emerging sector, Bitcoin-native DeFi has risks, including smart contract exploits, liquidity fragmentation, and UX challenges. However, BitcoinOS has specifically designed its infrastructure to mitigate these risks.

• Q3: What role do decentralized autonomous organizations (DAOs) play in the Bitcoin DeFi ecosystem?

Edan Yago:"DAOs are a critical component of the ecosystem, as they facilitate decentralized governance and capital allocation for Bitcoin-native DeFi projects. By leveraging on-chain governance models, DAOs at BitcoinOS ensures that decision-making power is distributed across a community of stakeholders rather than centralized entities. They manage treasuries, funding development, and enforce protocol rules without intermediaries."

• Q4. Can Bitcoin power real-world financial applications?

Edan Yago: "Yes, by leveraging scalable zero-knowledge solutions, Bitcoin can facilitate high-throughput, low-cost transactions that traditional banking infrastructure struggles to support.

For instance, Bitcoin-backed stablecoins and decentralized lending platforms built on BitcoinOS could redefine how businesses and individuals interact with financial services, eliminating inefficiencies and reducing reliance on intermediaries."

• Q5. What impact could regulatory changes have on Bitcoin-native DeFi compared to Ethereum?

Edan Yago: "Bitcoin-native DeFi protocols could benefit from a more favorable regulatory outlook compared to Ethereum-based alternatives, which often face scrutiny due to their reliance on centralized components and wrapped assets. BitcoinOS’s trust-minimized framework ensures compliance-friendly DeFi solutions without sacrificing decentralization.

As governments around the world re-define their stance on crypto, This regulatory advantage could drive further institutional interest in Bitcoin-native financial applications. As Ethereum continues to struggle with execution,  Bitcoin-native DeFi protocols could dominate the next phase of the crypto market rebound. 

Based on our projections Bitcoin DeFi TVL could potentially cross the $10 billion mark during the next wave of institutional inflows."

• Q6. How do traditional financial institutions view Bitcoin DeFi compared to Ethereum DeFi?

Edan Yago: "Traditional financial institutions are more inclined to explore Bitcoin-native DeFi due to Bitcoin’s long-standing reputation as a secure and battle-tested asset. While Ethereum’s ecosystem is innovative, its reliance on complex smart contracts and fragmented Layer-2 scaling solutions creates additional risks for institutional players.

By offering a more secure and composable framework, BitcoinOS is bridging the gap between traditional finance and decentralized finance, making it easier for institutions to participate in DeFi without compromising on security or regulatory compliance."

In Summary:

As Ethereum as grapples with scalability challenges and network inefficiencies, Bitcoin's market dominance continues to strengthen. The BTC/ETH trading ratio reaching all time highs of 44.6 this week reflects skewed capital allocation towards Bitcoin in the spot markets.

As Ethereum's underwhelmping performance threatens its $100 billion DeFi ecosystem, Bitcoin-native projects are gaining traction. BitcoinOS CEO Edan Yago hints that impact of BTC widening spot price dominance over ETH, could also potentially impact DeFi protocols. 

With increasing regulatory clarity and rising institutional adoption of BTC under Trump, Bitcoin-backed financial applications are poised to make bigger impact on the decentralized finance space in the coming months.

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